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Car Rentals

Will rental car fleets be EV early adopters?

Written by: Alexa Stone

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The rental car industry represents 1.5 million to 2 million cars per year, a significant part of new sales.
o Hertz orders 100,000 Tesla Model 3 vehicles
The rental car industry’s major players have not made major commitments to electric vehicles as part of their fleets to date
The Hertz deal with Tesla will pressure its competitors like Avis Budget Group and Enterprise Holdings to consider adoption of EVs more seriously.
Enterprise plans to transition its fleet. Its research shows range anxiety and lack of public charging remain major consumer concerns.
Government scrutiny of rental car emissions and consumer interest in EVs will continue to grow.
o The economics of the rental car industry give Avis Budget Group and Enterprise Holdings reasons to go slow adopting electric vehicles.
They make every time a renter forgets to return a car with a full gas tank.
The deal between Hertz and Tesla for 100,000 vehicles signals that other major rental car companies may soon need a strategy for EVs.
o The three companies represent as much as 95% of the car rental agencies at an airport terminal
Enterprise owns Alamo and National
Hertz owns Dollar and Thrifty
o Hertz is spending over $4 billion
Avis combined with Budget
o Only Hertz has offered a significant number of EVsway to date
Its focus was limited to the niche market of luxury renters
Offered high-end electric cars from Porsche and Tesla
Numbers were at the level of a “few hundred” in the fleet versus the 100,000 Teslas in the Hertz deal.
o $4.2 billion of revenue for Tesla
The single-largest purchase ever for electric cars.
In 2019, Amazon placed an order with Rivian for 100,000 delivery vans.
o Tesla Model 3s will be available to rent at Hertz locations in major US markets and parts of Europe starting in early November
Customers will have access to Superchargers
Hertz is also building its own charging infrastructure.
o The electrification plan eventually will encompass almost all of Hertz’s half-million cars and trucks worldwide
o Today, 40% of US consumers say they are likely to consider an electric vehicle the next time they are in the market for a new vehicle
According to Pew. Global EV sales skyrocketed 200% in the last year
In August, three US automakers pledged to boost EV sales to 40-50% by 2030.
o Growth is powered by
High efficiency
Positive user experience
Climate change benefits
Battery breakthroughs
Rapidly expanding charging networks
Lower maintenance and fuel costs.
o Beginning in early November and expanding through year end, customers will be able to rent a Tesla Model 3 at Hertz airport and neighborhood locations in US major markets and select cities in Europe.
o Hertz is installing thousands of chargers throughout its location network.
Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the US and Europe.
o Hertz will offer a premium and differentiated rental experience for the Tesla EVs
Digitized guidance to educate customers about the electric vehicle to get them on their way quickly
An expedited EV rental booking process through the Hertz mobile app.
o With the current order, EVs will comprise more than 20% of Hertz global fleet
Expected to be supported by a combination of Level 2 and DC fast charging
In approximately 65 markets by the end of 2022
In more than 100 markets by the end of 2023

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Projected growth would bring another 8.5 million EV’s into the 2025 market, and 50 million by 2040. That would be a 58% market share of the automobile market.

By 2030, a full 58% municipal busses should be electric-powered, as would 28% of light commercial vehicles.


[1] — Car rental role in the EV revolution
[2] — Tesla-Hertz EV deal